This post originally appeared on Orphan Road.

Recently, I was chatting with a friend who works in government, and the topic of density and growth management came up.  We were discussing whether or not growth management leads to increased home values, and I made a point that I think doesn’t get discussed enough: growth management and density need to go hand-in-hand.  You can maybe have the latter without the former (if, say, you happen to build a city on the edge of a cliff or on a tiny island), but you really can’t have the former without the latter.

For example, why is housing so cheap in Texas?  Well, there are two reasons.  One, the Texas government puts strict restrictions on the size of your mortgage, which limits the rate at which house prices can rise.  That, in turn, limits the amount of money people can afford to spend on real estate.  This might be a problem, except for the other reason: land is cheap and plentiful in Texas, and there’s little or no growth management. So development in Texas tends to spread out until supply reaches an equilibrium with demand.

In Seattle, the state’s Growth Management Act prevents development from spreading out.  In theory, it should just spread up instead – until supply reaches equilibrium with demand – and housing should be nearly as cheap as it is in Texas.*  Obviously this hasn’t happened, for a number of reasons: (a) local regulations, such as minimum parking requirements, increase the cost of building up, (b) federal lending agencies such as the FHA are biased towards detached, single-family housing, and (c) local opposition, such as what we’re now seeing in Pioneer Square and Roosevelt, prevents housing from reaching the level of density needed to achieve the necessary supply-demand balance.  If we had Texas’ strict, paternalistic mortgage laws, then something would have to give here; but we don’t, so we limp along with expensive housing and sub-optimal growth management instead.

While the GMA does theoretically encourage urban growth (“Encourage development in urban areas where adequate public facilities and services exist or can be provided in an efficient manner,” reads the law), clearly the carrots and sticks have not been tuned correctly. Perhaps cities have been given too much leeway to define modest density targets.  HB 1490, the Transit-Oriented Communities bill that failed in 2009, would have done a lot to rectify this.  Hopefully a similar bill will pass in the future.  Ideally, this kind of legislation would have been baked into the GMA from the start, since, as I said at the top, growth management and density really do go hand-in-hand.

* perhaps our higher housing costs are inevitable in Seattle given our higher per-capita income, but I suspect that it’s actually the reverse: employers here have to pay more for workers because housing is so expensive.